Michael: Of course, you can. Now, comes the third factor i.e. Volume-Profit trade-off. See, volume sales & profit per product are, in general, inversely proportionate. The more profit you keep per product, the lesser will be your total sales & vice-versa.

John: We need to strike a right balance between volume & profit per unit?

Michael: Perfect! That’s what I wanted to convey. What is that ‘right balance’ will depend on factors like your growth plan, monthly expenses etc.

John: [Smiles] Thanks a lot. Time to jump to the ‘correct’ part.

Michael: Yup. As an accountant, you must ensure that the selling price is covering cost & giving generating profit at the unit level.

John: Sounds simple.

Michael: But, all that glitters is not gold!

John: [Laughs] Ok, please explain.

Michael: [Pulls phone out of pocket] Look at this YouTube video made by me.

John: [After watching the video] That was practical. Now, I have understood the ‘correct’ part as well. Thanks a lot.